NFL, Aereo, Fox, Martha Stewart: Intellectual Property

The National Football League won
preliminary court approval of the settlement of a lawsuit
accusing it of failing to compensate former players for using
their likenesses in promotions.

The accord, which calls for the creation of a special
licensing agency to market those publicity rights and the
creation of a $42 million fund overseen by former players to aid
their peers, was approved yesterday by U.S. District Judge Paul A. Magnuson in St. Paul, Minnesota.

Magnuson’s approval was granted over the objections of some
of the ex-players who filed the 2009 case. Opponents include
Fred Dryer of the Los Angeles Rams, the Minnesota Vikings’ Jim Marshall and Dan Pastorini of the Houston Oilers.

“These players contend that the settlement is not
appropriate because it does not directly benefit them,” the
judge wrote, “ignoring the fact that the settlement in fact
directly benefits those in whose name the lawsuit was
purportedly brought: the players who toiled in obscurity and now
are destitute.”

The accord’s opponents contended that distributing the bulk
of the settlement proceeds to the fund was only the second-best
use of the money. The league is also paying $8 million toward
defraying the plaintiffs’ legal costs and setting up the
licensing agency.

“For the first time in the history of the game, retired
players will be represented at the table,” said Pro Football
Hall of Fame member Jim Brown in a joint statement with other
ex-players and their lawyers who lauded yesterday’s ruling.
Brown, a former player with the Cleveland Browns, is among those
named as initial members of the supervisory panel for the fund
and of the licensing agency created under the accord.

The case is Dryer v. National Football League, 09-cv-02182,
U.S. District Court, District of Minnesota (St. Paul).

Macy’s Accuses J.C. Penney of Exclusive Martha Stewart Sales

Macy’s Inc. accused J.C. Penney Co. (JCP) of selling Martha
Stewart-branded goods in categories exclusive to Macy’s as a
trial resumed over the right to sell some of the merchandise.

Macy’s, J.C. Penney and Martha Stewart Living Omnimedia
Inc. (MSO) returned to court yesterday in Manhattan to pick up a trial
that began Feb. 20. New York State Supreme Court Justice Jeffrey K. Oing ordered the two retailers and home merchandise company
into mediation on March 7 after about two weeks of proceedings.
The trial resumed without any comments by lawyers or the judge
on the mediation process.

Ted Grossman, a lawyer for Macy’s, told the judge that J.C.
Penney sells products on its website that are in categories
exclusive to Macy’s under “Martha Stewart Celebrations,”
including champagne flutes, wine glasses and pitchers.

Eric Seiler, an attorney for Martha Stewart Living, said
the items are plastic and disposable and don’t violate a
preliminary injunction issued by Oing last year blocking Martha
Stewart Living from selling items exclusive to Macy’s.

J.C. Penney in December 2011 acquired a 17 percent stake in
New York-based Martha Stewart Living for $38.5 million as the
department-store chain seeks to revive sales with new mini-
stores dedicated to Martha Stewart and other brands.

Macy’s, which has sold Martha Stewart-branded home goods
since 2007, sued her company in January 2012, saying it had the
exclusive right to sell items in certain categories including
bedding and cookware. Macy’s sued Plano, Texas-based J.C. Penney
about three months later.

Mark Epstein, an attorney for J.C. Penney, said he believes
the items are allowed under Oing’s injunction. Attorneys for the
company are looking into the items and will stop selling them if
they are determined to violate the injunction, Epstein said.

Macy’s Grossman said the “basic shapes and designs” of
the items are the same as some being sold at Macy’s.

Oing said he will allow attorneys for J.C. Penney and
Martha Stewart Living to look into the matter and will listen to
oral arguments on any motion Macy’s may make on the issue.

Copyright

News Corp. to Take Fox Off Air If Courts Back Aereo Service

News Corp. (NWSA)’s Fox network will go off the air and become a
cable channel if U.S. courts don’t stop Internet startup Aereo
Inc. from retransmitting shows like “The Simpsons” without
permission, said Chief Operating Officer Chase Carey.

Fox and its affiliate stations would stop broadcasting and
serve only pay-TV customers to protect the billions of dollars
spent annually on programs, along with advertising revenue and
hard-won fees from pay-TV systems, Carey told TV executives
yesterday in Las Vegas. A U.S. appeals court last week rejected
broadcasters’ pleas to shut down Aereo.

Carey is threatening to upend traditional broadcast TV to
counter Aereo, a company backed by Barry Diller, the Fox network
founder. If CBS, NBC and ABC follow, it would and mark an end to
television as it’s been known since “The Honeymooners” aired
in the 1950s. Fox and other networks are evaluating what to do
next after the appeals court ruling.

“We need to be able to be fairly compensated for our
content,” Carey said. “This is not an ideal path we look to
pursue, but we can’t sit idly by and let an entity steal our
signal. We will move to a subscription model if that’s our only
recourse.”

The broadcast networks sued Aereo in March 2012, claiming
it infringed copyrights by capturing their over-the-air signals
with tiny antennas and delivering shows to subscribers on
computers and smartphones.

With the appeals court ruling, Aereo can go ahead with a
planned national expansion of its service from its base in New
York, Diller said in an e-mail last week. Virginia Lam, a
spokeswoman for Aereo, had no immediate comment on Carey’s
remarks. Bloomberg LP, which owns Bloomberg News, is an Aereo
partner and offers its cable channel on the service.

For more, click here.

For more copyright news, click here.

Technology Companies

Facebook COO Sheryl Sandberg Seeks to Quash Subpoena in Suit

Facebook Inc. (FB) Chief Operating Officer Sheryl Sandberg will
move to quash a subpoena requiring her to give a deposition in a
lawsuit alleging that seven technology companies broke antitrust
laws by agreeing not to recruit from one another, according to a
court filing.

A hearing to resolve Sandberg’s opposition to the subpoena
will be conducted by U.S. Magistrate Judge Paul S. Grewal, U.S.
District Judge Lucy H. Koh in San Jose, California, said in
court yesterday. On April 1, Koh said lawyers for employees
suing the companies could schedule a deposition of Sandberg
around April 23.

“We’ve been working out cooperatively a schedule that
works for Ms. Sandberg and her counsel,” Kelly Dermody, a
lawyer for the employees, told Koh yesterday. A lawyer for
Sandberg wasn’t in court.

Sandberg and her lawyers say they “have worked
cooperatively” to agree on a schedule, according to an April 5
status report, and requested a hearing either May 21 or May 23.
The planned April 23 deposition has been taken off the calendar.

Sarah Feinberg, a spokeswoman for Menlo Park, California-
based Facebook, has declined to comment on a Sandberg
deposition.

The San Jose case is In Re High-Tech Employee Antitrust
Litigation, 11-cv-02509, U.S. District Court, Northern District
of California (San Jose). A previous case is U.S. v. Adobe
Systems, 10-cv-01629, U.S. District Court, District of Columbia
(Washington).

The second phase of a trial was set to begin this week to
determine whether Oracle breached the contract at issue, and if
so, what amount Hewlett-Packard should be awarded in damages.
That proceeding was put on hold after Oracle yesterday
challenged a decision by a state judge in San Jose, California,
that it was late in filing a claim that Hewlett-Packard was
violating its free-speech rights.

In the trial’s first phase, Superior Court Judge James Kleinberg agreed with Hewlett-Packard that Oracle made a
commitment to develop software supporting servers that run on
Itanium chips, under an agreement the companies reached over
Mark Hurd’s transition from chief executive officer of Hewlett-
Packard to co-president of Oracle.

Oracle filed a motion to throw out the case based on free-
speech claims and filed an immediate appeal when the trial court
decided the motion was untimely. A state appeals court must now
rule on that question before the trial can proceed.

Before the trial, Hewlett-Packard said it was seeking about
$500 million in damages, according to a person familiar with the
matter who asked not to be identified because the damages
request is confidential.

Trade Secrets

Pangang Group Summons in U.S. Trade Secret Case Ruled Faulty

China’s Pangang Group Co., facing criminal allegations by
the U.S. that it conspired to steal secrets about titanium
dioxide technology from DuPont Co. (DD), won a court ruling that
prosecutors failed to serve a summons.

U.S. District Judge Jeffrey S. White in San Francisco
rejected prosecutors’ arguments that they had properly served
the company and three of its units with court papers.

“The United States has still not met its burden to show it
has satisfied the delivery requirement,” White said yesterday
in an 11-page ruling.

Pangang runs the largest titanium complex in China and is
one of the country’s biggest titanium pigment producers,
according to its website.

Pangang, a California businessman and two former DuPont
employees were charged last year with conspiring to steal
information about chloride-route titanium dioxide, a white
pigment used in paint, plastics and paper.

The U.S. defendants sold the confidential information to
Pangang so it could develop a large-scale factory in Chongqing,
prosecutors alleged. DuPont, based in Wilmington, Delaware, is
the world’s largest manufacturer of titanium dioxide, and won’t
sell or license its technology to Chinese companies.

The U.S. encountered difficulty delivering notice of the
charges to the corporate defendants, leading the court to
initially quash service against them last year.

The judge directed prosecutors and the defendants to appear
in court on April 18 to address how they intend to proceed.

The case is U.S. v. Liew, 11-cr-00573, U.S. District Court,
Northern District of California (San Francisco).

Cybersecurity

Huawei Defends Equipment Security Amid U.S. Spying Concerns

Huawei Technologies Co., China’s largest maker of
telecommunications equipment, said it doesn’t pose a U.S.
security threat as it defended itself against foreign
governments’ concerns that it aids intelligence agencies.

The Shenzhen-based company “never sold key equipment into
U.S. networks,” Deputy Chairman Guo Ping said yesterday after
the company released its annual report. Huawei became one “of
the world’s top three smartphone makers” in the fourth quarter
and expects the proportion of sales from networking equipment,
the area that has drawn foreign scrutiny, will decline.

Huawei is fighting concerns over cybersecurity in markets
from the U.S. to Australia as American intelligence agencies and
security companies traced Web attacks to China. Softbank Corp. (9984)
and Sprint Nextel Corp. (S) told a U.S. lawmaker last month they
won’t integrate equipment from the Chinese company into Sprint’s
network after they merge, the legislator said.

“There has never been any incident of our product
threatening cybersecurity or network security,” Guo said.
Huwaei serves more than 600 telecommunications operators in more
than 140 countries, he said.

Huawei is the world’s second-largest maker of equipment for
phone networks, after Ericsson AB.

For more, click here.

Law Firms Trying to Profit from Cybersecurity Concerns

Lawyers and consultants have taken to lobbying various
members of the federal government on cybersecurity issues.

David Ransom, a partner at McDermott Will & Emery LLP,
spoke with Bloomberg Law about how a wide range of industries is
concerned about the potential impact of cybersecurity
legislation.

“The reason you’re seeing all these lobbying registrations
on this issue is just the breadth of the industries affected,”
he said.